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    May 19, 2021

    Employment In Australia, Getting Better Or Worse?

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    What do we mean by Employment Change & Unemployment Rate? 

     

    The employment change measures the change of a country's employment. A negative release means the jobs that were lost were more than gained. On the contrary, more jobs were gained when the release shows a positive figure. In Australia, estimates include both part-time and full-time jobs, and it covers works for pay or profit, or unpaid family work. 

     

    On the other hand the unemployment rate is the percent of people who are able to work that do not have a job. When the economy is in decline and jobs are less available, the unemployment rate is expected to go up. When the economy is growing and jobs are available and being created, it can be expected for the unemployment rate to go down.



    What are the Expectations for the Australian Employment Change & Unemployment Rate?

     

    AUD Employment is expected to have a 20.3k increase in April, down from the 70.7k increase previously in March. The employment change numbers have been above expectation for a few months, with February and March being more than double the expected number.

    On the other hand, Australian Unemployment Rate previously in April 2021 was at 5.6%. The expectation for May 2021 is for the unemployment rate to be unchanged at 5.6%. Will that be the case?



    Professional Insight

     

    Treasurer Josh Frydenberg said recently, “the third Budget would create 250,000 jobs by the end of 2022-23,” adding that "Jobs are coming back." The upward trend is a good morale boost for the Australian Dollar’s performance as the recovery of the labor market may continue. It seems that the government is confident with the upcoming data release. We should be prepared before it.

     

    What happens if...

     

    we finally get a number that is higher than expected? This could be a signal for a thriving economy given the circumstances. People would be more confident in the markets. Both equities and foreign exchange. As people are getting more jobs you can expect to see a rise in spending, spurring the economy. This will mean that AUD may increase in value relatively versus other currencies.

     

    Regarding the unemployment rate, what happens if we see a number higher than 5.6%? If that is the case we can expect the Australian Dollar to depreciate as a higher unemployment rate signals a weakening economy. 

     

    What happens if...

     

    we see the Employment Change come out lower than expected? Markets will likely shrink because people could get nervous about losing jobs, meaning people will be unwilling to spend money and instead save for a rainy day. The AUD may decrease in value relatively versus other currencies.

     

    Regarding the unemployment rate, what happens if we see a number lower than 5.6%? If that is the case we can expect the Australian Dollar to appreciate as a lower unemployment rate signals a strengthening economy.

     

     

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